From Socrates to Yogi Berra: Identifying Your Ideal Client

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Socrates said it well: “Know thyself.”

But Yogi Berra said it better: “If you don’t know where you’re going, you’ll end up somewhere else.”

For RIAs, self-knowledge – which includes an understanding of the firm’s ideal client persona (the people you need to be spending your time with for maximum profitability) – is the first and most necessary step on the road to success and scalability.

Don’t accept this premise based on my intuitive logic; the numbers bear it out. In its most recently completed benchmarking study for RIAs, Schwab Advisor Services polled over 1,200 firms of various sizes, representing an aggregate of $1.8 trillion in AUM. Results showed that organic growth (increases in the client base through referrals, new client recruitment, marketing, and other outreach, excluding market gains or losses) reached a five-year high. Firms with written marketing plans, ideal client personas, and client value propositions attracted 42% more clients and 45% more assets from existing clients than firms lacking these three key positioning documents.

Firms that know themselves and have a solid (read: written) concept of where they’re going achieve greater success than other firms. Let’s look at a few reasons why this is the case.